The fair, reasonable and non-discriminatory (FRAND) royalty rate for Nokia's entire portfolio of video codec patents allegedly essential to the H.264 standard may be ZERO. Or at least not much more than that, unless Nokia stages an unprecedented turnaround in its SEP dispute with Chinese computer maker Lenovo.
When all is said and done, it's possible that a number of licensing executives in the industry will realize they shouldn't have met Nokia's H.264-related royalty demands: they should all have defended themselves like Lenovo. Now it's too late: license agreements generally don't allow a recovery of fees that could have been avoided by litigation. Don't feed the troll!
Lenovo, by the way, is not merely defending itself super-successfully against Nokia's infringement cases, but also brought a FRAND complaint against the failed handset maker in the Northern District of California late last year (allegations of ambush tactics included).
The state of play in Nokia v. Lenovo is a total disaster so far for the Finnish plaintiff. The only victory in a German regional court that Nokia had scored was short-lived: the Munich Higher Regional Court stayed enforcement because the patent-in-suit appears invalid. Yesterday (February 02, 2021) the Mannheim Regional Court rejected Nokia's complaint over EP1186177 on "a method and associated device for filtering digital video images." That patent is so old that Nokia couldn't have obtained an injunction anymore. On Friday (January 29, 2021) the same court held a trial over EP1512115 on "spatial prediction based intra coding" and urged Nokia to stipulate to a stay pending the parallel nullity proceeding before the Federal Patent Court. Nokia consented (otherwise the court would almost certainly have stayed the case anyway). And there was another Mannheim case I never reported on: EP1287705 on "video coding" was not infringed.
Nokia is still suing Lenovo in Munich, but the next trial there is scheduled for July 07, 2021.
All of this doesn't bode well for all the renewals of license agreements that Nokia needs in the near term (various deals are set to expire by the end of this year).
Lenovo, however, will likely get better deals with various patent holders, as it has shown that it's the opposite of a soft target. Lenovo is represented in the Nokia cases by a Freshfields team led by Prince Wolrad of Waldeck and Pyrmont and Dr. Nina Bayerl, a Hoyng Rokh Monegier team led by Hoyng Rokh Monegier's Klaus Haft (who actually used to be lead counsel to Nokia in numerous past cases, such as against Apple and HTC), and by Maikowski & Ninnemann patent attorney Dr. Gunnar Baumgaertel ("Baumgärtel" in German) and his team. Furthermore, Nvidia is an intervenor on Lenovo's side, and represented by Bardehle Pagenberg.
In a couple of weeks the Dusseldorf Higher Regional Court will rule on Nokia's interlocutory appeal of the lower Dusseldorf court's decision to refer a set of SEP licensing questions (in Nokia v. Daimler) to the Court of Justice of the EU. That matter has been assigned to the senate over which Judge Dr. Thomas Kuehnen ("Kühnen" in German) is presiding. His positions on component-level licensing and on the proper sequence of the Huawei v. ZTE FRAND analysis are well-known, so Nokia's next defeat is already in the making--and I guess Judge Dr. Kuehnen will go beyond the call of duty, not merely throwing out Nokia's interlocutory appeal but seizing this splendid opportunity to make his case to the top EU court in a compelling and persuasive fashion.
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